The OECS economies are small and highly open, which makes them volatile and prone to external shocks. Since 2010, some of the OECS countries have implemented strong fiscal consolidation programs and engaged in ambitious debt restructuring agendas.
Read More »
3. Strategies are needed in the medium-term to restore debt sustainabilityHigh public debt is a common denominator across the Caribbean, and the OECS is no exception. At 89.2%, aggregated public debt ... Show More +is a major source of vulnerability in the sub-region.With the exception of St Kitts and Nevis, which has enjoyed relatively robust growth, reducing this debt to 60% of GDP by 2030 is an elusive target for all OECS countries. However, if medium term debt reduction strategies are implemented, debt sustainability can be restored in the region. 4. The current account deficit is expected to improve over medium-termWhile gradual, World Bank research predicts an improvement in the OECS’ current account deficit by 2017 -- reaching 17.5% in GDP.The recovery of the tourism industry over the coming years is expected to be a main driver in shrinking this expenditure gap. However lower fuel import bills through investment into alternative energy along with falling oil prices will also contribute to improving the current account balance. As net oil importers, the global drop in oil prices could favorably impact economies in the OECS, easing inflationary pressures in the region. Show Less -